Enterprise software can represent as much as 30% of an organisation's IT spend, so at a time when budgets are still being squeezed like never before, CIOs are understandably being careful to ensure that their investment in software represents value for money.

However, software licensing costs can be a real bugbear for CIOs, with the potential to quickly ratchet up the overall price through painful non-compliance fines, unwittingly incurred as a result of software vendors' complex and convoluted terms.

The challenge is exacerbated as each software vendor has its very own unique brand of complexity, which makes the jobs of the IT Asset Manager, the CIO and the CFO even more taxing. In this article, we examine some of the key challenges and solutions for dealing with IBM's software licensing.The problematic portfolio position.

IBM has over 1,500 products on offer available on around 30 licensing metrics; each metric may differ only very slightly, but can still have a significant impact on licensing requirements and position. Historically, the picture has been further complicated with IBM through its well-known practice of acquisitions, expanding the product portfolio and licensing metrics even further. IBM may choose to retain the licensing metrics of the company they acquire, and sometimes may choose not to.

For customers this can be incredibly difficult to track; and without careful management and analysis of their IT estate, businesses can find themselves operating under altered metrics and contracts without realising. It goes without saying that non-compliance fines can often be the result of this - and large software vendors, as we know, have found a lucrative income stream in such levies.It's relatively widely known that IBM has a tendency to be one of the most aggressive vendors on the market when it comes to non-compliance. IBM's fines, which can include a two year back penalty on maintenance clauses in addition to the costs of 'missing' licenses, are considered harsh even in comparison to other large vendors.

Indeed, just a few years ago, IBM sought to audit all of its corporate customers without warning and with huge audit teams, which netted them a considerable amount of income. Of course, IBM isn't the only vendor that is a fan of the surprise audit and there are a couple of things that businesses can do to ensure that if an audit arrives, they're not caught unaware.

1. Preparation is the first line of defence - ideally businesses should seek independent third-party confirmation of their licensing position both pre and post audit.

2. IBM has now lengthened the list of its products that are eligible for its sub-capacity licensing.

3. Dealing with sub-capacity licensing - irrespective of how enterprises partition their machine, without a sub-capacity license in place, they may still get charged for full-capacity.